Collective Brands Q1 misses Street, shares fall

May 24 - Footwear retailer Collective Brands Inc posted a much lower-than-expected quarterly profit as cold weather and higher product costs led to fewer customers visiting its stores, sending its shares down as much as 16 percent after the bell.

Payless brand (owned by Collective brands Inc)

Sales at its Payless domestic segment, which accounts for over 50 percent of total revenue, fell 8.8 percent to $498.4 million. Total sales were down 1.1 percent to $869 million.

The Topeka, Kansas-based company said sales were affected by higher gas and food prices on its Payless customer base.

Collective Brands' peer Brown Shoe , which will report its first-quarter results on Thursday, is also expected to be hurt by rising costs.

The holding company of Payless ShoeSource and Performance + LifestyleGroup also saw gross margins dip 260 basis points on higher product costs.

February-April net income was $26.4 million, or 42 cents a share, compared with $54.2 million, or 83 cents a year ago.

Analysts on an average expected a profit of 82 cents a share, on revenue of $915.3 million, according to Thomson Reuters I/B/E/S.

Shares of the company were trading at $16.02 after the bell. They closed at $18.37 on Tuesday on the New York Stock Exchange.

(Reporting by Arpita Mukherjee in Bangalore; Editing by Roshni Menon)